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From: «1.
Sent: 3 ember 2011 09:41
To:
Ce: Ex); Gibson Will (ShEx)
Subject: JFSA and Private Eye
Attachments: Private Eye extract. pdf
Private Eye
2xtract.pdf (2 MB)...
In view of this article, it would be helpful to have some more sense of where the legal action might
be heading and likely timescales from a POL perspective. Perhaps we can pick up in the margins
of our meeting on Monday?
Regards
Department for Business, Innovation and Skills
Shareholder Executive
Royal Mail and Postal Services
1 Victoria Street
London SW-
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}POST OFFICE AUTOMATION
IComputer
‘says no
$ Britain's multi-billion pound public 1T
programmes hit the next stage In the
lifecycle of botched computer projects —
malfunction ~ alarming repercussions are
being felt in Britain's post offices.
‘Over the last few years the Horizon system
that 11,500 sub-postmasters are forced to use bi
thrown upa rash of apparent financial “shortfalls”,
prompting dozens of prosecutions and financial
I Tuin for businessmen and women with previously
spotless records. Fifty-five of them last_weel
Iaunched a “elass action” against the Post Office,
fing their troubles owe more to computer error
ishonesty.
than
In a standard week a sub-post office
performs thousands of transactions —
many such as pension payments
and lottery and foreign currency
purchases, in cash. When the
Computer says the till is short, the
sub-postmaster (oF mistress) has
to cough up the difference; and
the computer. is always right
apparently. If the sub-postmaster or
‘mistress can't pay up, the Post Office's
fraud investigators swiftly descend.
‘Typical is the case of Jo Hamilton from South
\Wamborough in Hampshire, who one week was
£2,000 down. After the helpdesk told her to press
a few buttons the total doubled, and the Post
Office took £4,000 off her. When the problem
kept repeating, her mistake was to claim that
everything was fine so she could at least keep
trading in the hope the errors would correct
themselves and she'd get her £4,000 back. Then
the total hit £36,000, the auditors swooped and
she was convicted for false accounting (without
‘ever being accused of taking any money) and
forced to pay the £36,000 back with the help of
supportive villagers.
Others have been jailed for theft simply on
evidence from a computer system that seems to
be misfiring, with no indication of what they are
supposed to have done with the cash, One,
Scema Misra, was pregnant when she was found
guilty of stealing £75,000 even though no trace
‘of the money could be found and the judge at
Guildford crown court, according to supporters
Present, appeared to instruct the jury that the
Evidence was very limited. She was sentenced to
18 months.
Since hee case, others have pleaded guilty
simply for more lenient sentences. Many more
have coughed up thousands of pounds from their I
‘own pockets in desperate attempts to retain their
livelihoods, The Justice for Sub-postmasters
Alliance reckons the total affected could run into
the thousands.
‘The Post Office remains the only body in the
UK to run its own prosecutions and campaigners
think that if it had to use the Crown Prosecution
Service many cases would not have made it to
court, The last organisation with such powers,
Customs and Excise, was stripped of them
almost a decade ago When it was found to have
overstepped the mark in several high-profile
cases.
Mrs Hamilton's MP, James Arbuthnot.
expresses a widely-held view when he says: “i
find it very difficult to believe that all these sub-
postmasters and sub-postmistresses are suddenly
found to be dishonest, if the altemative is that it
may be a public sector computer system which
has gone wrong. We've heard of that before.” Gut
postal services minister Ed Davey is washing his
hands of the problem, simply re-ditecting MPs"
‘questions to the Post Office itself.
‘There is no shortage of visible problems with
Horizon, One sub-postmaster explained to the Eye
how when selling stamps, for example, his
terminal often either registered no stamp
sale or not the class of stamp keyed
in. And in July the entire Post
Office banking system was shut
down by a “Horizon online
issue”. Even the 370 large
“Crown” post offices managed
centrally are not immune from
glitches. Latest known figures
show shortfalls there of £2.2m in a
year, although mysteriously, these
haven't produced criminal sanctions.
‘These are just the latest episode in Horizon’s
inglorious history. It originated in 1996 in a joint
Department of Social Security-Post: Office PFI
deal for an automated benefits payment system
with Pathway, part of ICL (now Fujitsu) on the
back of a cheap but technically flawed bid. Four
years and £lbn later it was ditched by the
government, with the Post Office left to convert it
into the Horizon automation project. Fujitsu still
runs the technical side of things.
‘The lengthening list of “shortfall” cases,
many in odd geographical clusters, has received
little attention beyond diligent investigation by
BBC South TV hack Nick Wallis and Computer
Weekly magazine. This could be about to change,
though, as solicitors Shoosmith begin action on
behalf of the 55, with another 150 cases pending.
‘The Post Office, fearing immense further
cost if its computer system is found wanting, has
its head firmly in the sand, There are, a
spokeswoman told the Eye, “no issues" with
Horizon (which is nonsense given the ones
already admitted). To say anything clse would be
to admit that the computer on which it depends is
a pig in a poke that has not only wasted bi
but might now be dispensing miscarriages of
justice as well.
a s:<.)
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Page 1 of 2
From:
Ser 30 September 2011 09:48
To: (shcx)
Subject: RE: JFSA and Private Eye
Yes — we can give an update of the position.
Thanks
Post Office Ltd
1st Floor, 148 Old Street, London, EC1V SHQ
(ShEx); Gibson Will (ShEx)
Subject: JFSA and Private Eye
<<Private Eye extract.pdf>>
In view of this article, it would
action might be heading and li
be helpful to have some more
ikely timescales from a POL Perspective. Perhaps we can
pick up in the margins of our meeting on Monday?
Regards
Department for Business, Innovation and Skills
Shareholder Executive
Royal Mail and Postal Services
1 Victoria Street
London = ag 3]
sense of where the legal
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Page 2 of 2
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aceavasenenanesennstnasnseneenes Royal Mail Group Limited registered in England and Wales
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24/09/2012
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From: 8 (ito:
Sent: 17 September 2011 20:44
To: (ShEx)
Subject: RE: JFSA legal action and Outline terms of reference for Local Stakeholder Group
On the JFSA point () the following may help for the moment I but Ii Il inform you further
when we know more of the appropriate details.
Thank you for your email of 5 September 2011 in relation to the notification from JFSA that
an initial batch of letters had been issued against POL.
I can confirm that POL has to date received two letters before action from Shoosmiths
solicitors, dated 16 August 2011 and 23 August 2011, setting out claims by Mr Scott
Darlington and Mr Julian Wilson (two former subpostmasters) respectively.
Both letters make allegations about the Horizon system.
We have acknowledged receipt of both letters and are currently investigating the allegations
made, with a view to sending substantive responses by the end of the month.
No claims have been issued as yet. In the event that claims are issued, POL's current
intention is to defend the claims in full and possibly counterclaiming for any losses incurred
at the relevant branch during the periods in question. However, a final decision on strategy
will not made until we have investigated the basis for each of the claims.
The letters are very similar, with both claiming damages of £150,000 for breach of contract
and/or for negligence and/or for misrepresentation and/or misfeasance in public office.
These claims are based on POL's alleged failure to (i) provide proper training in relation to
Horizon; (ii) provide adequate system support for Horizon (e.g. the Helpline service); (iii)
ensure that Horizon was free from defects; (iv) provide a suitable and fair way of dealing
with transaction corrections; and (v) operate any disciplinary processes within the
subpostmaster contract fairly. It is also alleged that certain terms of the subpostmaster
contract are overly onerous/unfair (Section 1, paras 8 & 10 and Section 12, paras 4 & 12).
Although the value and basis of the two claims are almost identical, the facts differ. Once
we have fully investigated the factual matrix to each claim, we shall be in a position to assess
how best to respond substantively to the letters.
I trust that the above is helpful. If you require any further information at this stage, please
let me know
Thanks
Post Office Ltd
I 148 Old Street, LONDON EC1V 9H1Q
@ Postline:
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From: i (she) (ait
Sent: 13 September 2011 09:35
Ce: (ShEx)
Subject: JFSA legal action and Outline terms of reference for Local Stakeholder Group
We discussed on Friday the letter from the NI minister about NI representation
on the Stakeholder Group. Helpful to have early sight of the outline terms of
reference as I have to get a draft reply up to ED for tomorrow.
Also as discussed, helpful to have a note on the nature of the letters of claim
no behalf of JFSA members (what is being sought, how many submitted, what
the next stages are etc)
Regards
Department for Business, Innovation and Skills
Shareholder Executive
Royal Mail and Postal Services
1 Victoria Street
London SW1H OET
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Communications via the GSi may be automatically logged, monitored and/or recorded
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hennnanianinnnnenaannanenainennananncnnnos Royal Mail Group Limited
registered in England and Wales registered number 4138203 registered office 3rd Floor, 100
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From: i :2iltc: is
Sent: 25 November 2011 19:07
To: RR Shex)
Subject: Inside Out programme
fy
As discussed — we believe that piece on Horizon allegations will be included in the InsideOut
programme on BBC East that will air on Monday — the journalist has asked a series of
detailed questions — and the material that has been sent in response is attached
Thanks
Post Office Ltd
1st Floor, 148 Old Street, London, EC1V 9HQ
registered in England and Wales registered number 4138203 registered office 3rd Floor, 100
Victoria Embankment, London, EC4Y 0HQ This email and any attachments are confidential
and intended for the addressee only. If you are not the named recipient, you must not use,
disclose, reproduce, copy or distribute the contents of this communication. If you have
received this in error, please contact the sender and then delete this email from your system.
This email was received from the INTERNET and scanned by the
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Helpdesk.
Communications via the GSi may be automatically logged, monitored and/or
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From: a (ShEx)
Sent: 25 November 2011 17:16
To: Gibson Will (ShEx); (ShEx); i Shex);
HEE She);
Cc: Storey Susannah (ShEx); Lowe Roger (ShEx)
Subject: FW: Horizon computer system
Attachments: Horizon BBC Insight Out final Nov 23 2011.doc
Hi
You may already have this information, but in case you don't, see attached and
below.
Thanks
I Royal Mail Team I Shareholder Executive I Department for Business, Innovation &
Skills I I 1 Victoria Street, London, SW1H OET I [a
I www.bis.gov.uk
BIS - working together for growth
From: David Simpson [mailto:david.simpso
Sent: 25 November 2011 17:14
To: Lowe Roger (ShEx); SEI ShEx)
Cc:
Subject: Horizon computer system
Roger, aes) here is the statement we are
using with the BBC Inside Out programme in East
Anglia. We expect them to screen an item about
the system on Monday evening.
Have a good weekend,
David
setesesatneneteennsnenatnenntansnsinsnnansenansansnsanennsutentenanes Roval Mail Group Limited
registered in England and Wales registered number 4138203 registered office 3rd Floor, 100
Victoria Embankment, London, EC4Y 0HQ This email and any attachments are confidential
and intended for the addressee only. If you are not the named recipient, you must not use,
disclose, reproduce, copy or distribute the contents of this communication. If you have
received this in error, please contact the sender and then delete this email from your system.
This email was received from the INTERNET and scanned by the
Government Secure Intranet anti-virus service supplied by Cable&Wireless
Worldwide in partnership with MessageLabs. (CCTM Certificate Number
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2009/09/0052.) In case of problems, please call your organisation’s IT
Helpdesk.
Communications via the GSi may be automatically logged, monitored and/or
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From: (Communications)
Sent: 28 November 2011 09:12
To: (ShEx)
Ce: (ShEx); Gibson Will (ShEx); EI(ShEx)
Subject: FW: Horizon
Attachments: Horizon BBC Insight Out final Nov 23 2011.doc
As promised on Friday this is what RM sent through.
Cheers
Senior Press Officer
Department for Business, Innovation and Skills Press Office
Email:
Phone:
Mobile (BlackBerry):
Out of hours media calls ~,
http://www. bis.gov.uk/newsroom
From: David Simpson [mailto:david.simpson‘_
Sent: 25 November 2011 17:04
To: Communications)
Subject: Horizon
HMM. good to talk with you. Here is the
statement I mentioned on the Horizon issues we
expect to be featured in the BBC Inside Out
programme on Monday evening in the East Anglia
area.
Have a good weekend,
David
HERI ISOS SDSS IDIOT TIE SSIS IIIA Royal Mail Group Limited
registered in England and Wales registered number 4138203 registered office 3rd Floor, 100
Victoria Embankment, London, EC4Y 0HQ This email and any attachments are confidential
and intended for the addressee only. If you are not the named recipient, you must not use,
disclose, reproduce, copy or distribute the contents of this communication. If you have
received this in error, please contact the sender and then delete this email from your system.
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preeereeeceecccvenrcerecccvtrcccleeerecrertcctttereccererecccecrrcrecd
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recorded for legal purposes.
Statement
“The Post Office is fully confident that the Horizon
computer system in its branches, and all the accounting
processes around it, enable subpostmasters to account
accurately for the transactions and balances they record.
“The system has been operating for over ten years. In that
time, thousands of subpostmasters will have used it in
performing many millions of successful weekly and monthly
financial reconciliations between the cash they have in the
office and the transactions they have handled. The Horizon
system has been rigorously tested. The National Federation
of Subpostmasters, which represents subpostmasters
throughout the country, has expressed its full confidence
in the accuracy and robustness of the system.
“All three cases that Inside Out has raised have all had
their contracts terminated following the most thorough
investigations by the Post Office. In two of the cases this
was three years ago; in the other it was 18 months ago.
They include a case where there was a subsequent guilty
plea in Court to a charge of theft and three cases of false
accounting, The Post Office has a duty to the tax payer to
ensure that individual branches properly and fully account
for the Post Office funds in their possession.“
Specific Cases Mentioned.
Mr Ward - Rivenhall.
Mr Ward was suspended in September 2008 following an audit
that identified a significant shortage in his account. The
shortage was investigated meticulously and this led to Mr
Ward’s contract for services being terminated in November
2008. Mr Ward appealed against the termination, but after
the full application of Post Office Ltd’s procedures for
such appeals (which are agreed with the National Federation
of Subpostmasters), the decision was upheld.
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Post Office Ltd is fully satisfied that the Horizon
accounting system merely recorded the data entered by Mr
Ward and his staff. The audit revealed a shortage of funds
compared to what the information entered into Horizon
indicated should have been there. There is absolutely no
evidence whatsoever to suggest the losses were down to
“computer error.”
Mrs O'Dell - Great Staughton
Mrs O'Dell was suspended on January 2010 following an audit
that discovered certain discrepancies. The situation was
investigated and Mrs O’Dell’s contract was terminated after
the full and proper procedures, including a right of
appeal, had been undertaken. There is absolutely no
evidence that the Horizon system contributed to the losses
and Post Office Ltd remains fully satisfied that the system
is robust and fit for purpose.
Mr Warren - Castle Hedingham
Mr Warren’s contract with the Post Office was ended in June
2008 after a large shortage of funds was discovered at an
audit. The Post Office followed all the appropriate
investigative and contractual processes before ending the
contract. Mr Warren pleaded guilty on 30 March 2009 to one
charge of theft and three charges of false accounting. On
2nd November 2009 at Chelmsford Crown Court, Mr Warren was
sentenced to nine months’ imprisonment suspended for 18
months, with an unpaid work requirement of 75 hours.
We note that you state that Mr Ward and Mrs O’Dell say that
they have taken their cases to Shoosmiths solicitors. We
have received no information or documentation from
Shoosmith’s with respect to any civil claims being made
with respect to these particular branches, and the Post
Office believes there is no contractual (or other) basis
for such claims. If we were to receive any civil legal
claims in respect of these cases, the Post Office would
vigorously and fully defend its position. We are fully
confident in our position that the Post Office and its
systems have operated properly, accurately and fully
appropriately for an organisation that handles significant
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amounts of public money, and that the Post Office has
acted fully in accordance with our business contracts with
the parties concerned.
Additional specific questions asked by Maggie Dolan on 22
November
1. One of the case studies says that the Post Office does
not allow independent scrutiny of the Horizon system. Is
this the case?
Horizon and the Post Office systems environment have always
been subject to external scrutiny for both assurance and
accreditation purposes. Ernst & Young carry out an annual
financial systems audit; an independent auditor also
carries out a yearly audit to maintain the system’s Payment
Card Industry (PCI) accreditation. The system and its data
Centre are ISO 27001 accredited which requires an annual
audit from an independent agency. Horizon is also
accredited by HSBC Payment Services and WorldPay (Post
Office’s Merchant Acquirers) and must comply with the
VocaLink standard for card payment transactions. In
addition to these regular audits, ad hoc independent audits
of the system are initiated by Royal Mail Group and
supported by the Post Office.
2. Have you identified any operational faults with Horizon
or other systems and processes that interface with it which
could be behind some of the shortfall problems sub-
postmasters have had?
No - the integrity of the Horizon system is sound.
3. Could you give me a timescale as to when you are likely
to answer the questions put to your Managing Director Paula
Vennells by the Government about complaints made about the
Horizon system?
We assume you are referring to a number of Parliamentary
Questions raised by Mike Weir MP to which Post Office Ltd
are in the process of responding. These are not questions
that have been asked by Government, they are questions
asked by an MP and as they refer to an operational matter,
the Government has said that Post Office Ltd will reply.
This is in line with normal procedural practice.
4. As the operational responsibility for the Horizon system
rests with the Post Office, is there anything wrong with
LE?
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“The Post Office is fully confident that the Horizon
computer system in its branches, and all the accounting
processes around it, enable subpostmasters to account
accurately for the transactions and balances they record.
The system has been operated successfully for ten years by
thousands of subpostmasters who handle millions of
transactions every day. The National Federation of
Subpostmasters, who represent subpostmasters, has expressed
its full confidence in the accuracy and robustness of the
Horizon system.
General Background
The Horizon system has been operating for over ten years.
In that time over 20,000 different subpostmasters will have
used it in performing many millions of successful financial
reconciliations between the cash they have in the office
and the transactions they have handled.
For the tiny fraction who have not been able to reconcile
their cash and transactions, there are tried and tested
systems of checking, auditing and following up to determine
what has happened. For example, transactions might have
been miskeyed (writing 100 instead of 10), a clerk might
have handed out too much change, a clerk may have forgotten
to take the money for the transaction, there may even have
been rare instances of fraud by a customer. These checking
and auditing systems resolve virtually all discrepancies
satisfactorily. These discrepancies are caused by the same
kind of small day-to-day mistakes and human errors that any
large bank or retailer would experience.
In a extremely small number of cases after all these checks
have been undertaken, there remain significant missing sums
that can’t be accounted for. In such cases the Post Office
may take action to end the subpostmaster’s contract as
public money is entrusted to the Post Office and it is
vital that everything is fully accounted for. If
significant money is missing - either as a result of lack
of sufficient competence by the subpostmaster or their
staff or, in extreme and very rare cases, as a result of
dishonesty -it is not appropriate for that subpostmaster to
continue to operate the branch, and the Post Office will
seek to appoint someone new to take over.
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There have been a limited number of cases where Court
Action has been taken over missing sums of public money.
In some of these cases, the subpostmaster has made
allegations against the Horizon system that records their
transactions. The Courts have consistently upheld the Post
Office position that the Horizon system is accurate and
reliable. When former subpostmasters have been convicted of
false accounting and/or theft, it is, of course, the Courts
that have convicted, not the Post Office. In some cases,
the subpostmaster pleaded guilty; in others the Post Office
had to provide robust evidence to support the Crown’s case.
A criminal court will only convict an individual if it
considers that the evidence has shown, beyond reasonable
doubt, that the individual is guilty of the offences with
which they have been charged.
The Post Office takes meticulous care to ensure that the
Horizon computer system in branches nationwide is fully
accurate. Tens of thousands of Post Office branches have
used the system to reach financial reconciliations without
difficulty.
e The Post Office is fully confident that the Horizon
computer system in its branches, and all the
accounting processes around it, are absolutely
accurate and reliable.
e The Horizon system has been rigorously tested using
independently-assured, robust procedures. The Horizon
information security processes meet the relevant
industry standards which apply to such organisations
as banks and building societies.
* Subpostmasters are given fully appropriate training,
typically including classroom training and further
time on site under close supervision and guidance from
a Post Office manager. Subpostmasters can also ring a
dedicated helpline for advice.
e The Horizon system has operated successfully for over
10 years across the Post Office network, which
currently stands at more than 11,500 branches.
e The National Federation of Subpostmasters, which
vigorously represents the views and interests of
subpostmasters around the entire country, has gone on
record on a number of occasions to express its full
confidence in the accuracy and robustness of the
Horizon system.
The Horizon system provides detailed records of every
transaction, no matter how small or large, in any
individual Post Office branch. Separate records of all
key strokes in the system are stored in a tamper-proof
way.
The Post Office handles large sums of public money as
well as the money entrusted to it by the 20 million
people who visit our branches each week. The Post
Office rightly makes every effort and takes all
reasonable steps to protect the money in its care.
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Information about document “Losses and Gains Quick Guide
for Crown Managers
There is no suggestion whatsoever in this document to
support the assertion that losses are due to the Horizon
system. In fact, the document that you have identified is
an internal management document covering managerial
processes at the branches - Crown branches - that Post
Office Ltd directly operates. The document refers to the
2007/8 year - a time when there were 405 Crown branches.
These are typically very large city centre locations
employing significant numbers of staff and having a high
number of serving positions (typically around 10 per
branch) and handling around 20% of the total business
across the entire Post Office network.
The document covers the kinds of good managerial practice
that any large company handling significant amounts of cash
(such as the banks) would apply.
You draw attention to the stated figure of Crown Office
losses in 2007/8 amounting to £2.2m.
It is important to be clear about what this figure referred
to. The figure represents an end-of-year snapshot on the
total cases where clerks have not reconciled the cash and
stock (stock here includes value items such as stamps)
against the transactions that they have undertaken. This
can occur for a number of reasons. The clerk may have
recorded the transaction incorrectly (saying they paid out
£10 instead of £100); they may have made a mistake when
dealing with the customer (giving £10 change instead of
£5); they may have given out the wrong stamps (a First
Class instead of a Second Class, two stamps instead of
one); they may have miscounted the amounts that a customer
has paid in; they may have neglected to retain the
transactional supporting document; there may be examples of
fraudulent activities by the customer (forged documents); a
clerk may lose stamps or cash (falling behind a cupboard
etc); there may be cases whereby the clerk enters all the
details of the transaction, serves the customer but then
forgets to take payment from the customer - in most cases
the customer would point this out but there are some who
just walk off! In very rare cases there may be actual
dishonest activity by a member of staff.
As a result of all the above it is quite feasible for there
to be both losses and gains when the clerks’ tills are
reconciled. This is a situation that can and does occur in
any bank or indeed is a situation any retailer which
handles millions of transactions per week may experience.
The document shows the sensible managerial practice and
checks that any responsible bank or retailer would employ.
None of this implies in any way that there are any issues
with the Horizon system. These kinds of gains and losses
occurred when all recording was done manually before any
computerised systems (there were similar managerial control
systems and guides before any computerised systems). Every
bank and retailer will have similar approaches.
You draw attention to a particular phrase in the document
and draw attention to the words “accounting error” namely:
Additional Notes
Managers may apply some discretion should a ‘one-off large
loss’ be incurred with likely mitigating circumstances e.g.
known giro error, accounting error identified etc
This refers to situations where a large loss has been
recorded but it is clear to the manager what has happened —
in this case “accounting error” is shorthand for perhaps
recording something wrongly (keying in £10000 instead of
£1000 for example). In such cases although a large loss
will have been recorded, it is known that this can be
ultimately explained and corrected. All that this
“additional note” in the document is saying is that the
Manager has discretion in such cases with respect to
applying the defined escalation processes of informal and
formal interviews that ultimately can lead to possible
disciplinary code activity if a clerk is making a series of
mistakes. These procedures have been fully agreed at
national level with the CWU and form part of the Crown
Office Staffing Agreement.
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From: ERE AERO aE,
Sent: 06 January 2012 16:38
Subject: FW: post office (Arbuthnot, Hampshire) and JFSA
Attachments: ArbuthnotMPLI_1324373172345[1].pdf
isi)
As discussed. The MP wrote an identical letter to Moya Greene. The draft response that is
being sent up to Paula is below. We would expect to have sent out by mid week
PROPOSED DRAFT FOR PAULA.
Dear Mr Arbuthnot
Thank you for your letter of 15 December addressed to Moya Greene,
Chief Executive, Royal Mail Group Ltd about BMMMPost Office®. As
Managing Director of Post Office Ltd, Moya has asked me to reply to
you direct.
I fully recognise how important having continued access to Post
Office services is for our customers and I do understand your
constituents(] concerns about their local branch.
T am sure you will understand that I cannot go into specific detail
about osition as this is a contractual matter between us.
However I can confirm that not a Post Office employee but
has been operating on a temporary subpostmaster
contract since .__ Prior to that I understand that
Following the cessation of contract, the branch closed
temporarily from whilst we found a replacement
temporary subpostmaster to run the service. Unfortunately due to
unforeseen circumstances, the branch closed again between
fout reopened on QM, since which time there have
been no further problems. I know how important the Post Office is to
our customers, especially at Christmas, and I am very sorry for the
inconvenience caused on this occasion.
Moving forward it remains our intention to retain Post Office
services in [BBMMend appoint a permanent subpostmaster, which will
also help us to stabilise the service for our customers. The vacancy
has been advertised and our local field team will also be revisiting
the area in the next few weeks to see if there are any parties
interested in operating a service in
Turning to your more general comments about the Horizon computer
system, we handle large sums of public money, as well as the money
entrusted to us by the 20 million people who visit our 11,500
branches each week. There are a small number of previous and
existing subpostmasters, including MMMMho used to run
Post Office, who allege that financial discrepancies at
their branch are due to a fault with the system. We are also aware
of the activities of a group called Justice For Subpostmasters
Alliance, JFSA. There has been no evidence to support any of the
allegations and we have no reason to doubt the integrity of the
system, which we remain confident is robust and fit for purpose.
I do hope that the above information has clarified our position but
if you do have any further concerns, then please do let me know.
Yours sincerely,
Post Office Ltd
1st Floor, 148 Old Street, London, EC1V 9HQ.
EE She) (ait
Fro
Sent: 20 December 2011 09:43
To:
Ce: Shex); A (Shex); A SheX)
i;
Subject: Odiham post office (Arbuthnot, Hampshire) and JFSA
+i
Grateful for advice on the situation at Odiham, and also for the latest state of play re
the Shoesmiths letters before claim. It would be useful if you could share a copy of
Moya's reply.
Many thanks,
<<ArbuthnotMPLI_1324373172345[1]>>
I Shareholder Executive I Department for Business, Innovation & Skills
I I EEE I www.bis.gov.uk I
The Department for Business, Innovation & Skills (BIS) is building a dynamic and competitive UK
economy by creating the conditions for business success; promoting innovation, enterprise and
science; and giving everyone the skills and opportunities to succeed. To achieve this we will foster
world-class universities and promote an open global economy. BIS - Investing in our future
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Communications via the GSi may be automatically logged, monitored and/or recorded
for legal purposes.
saseasnnnnsnasunansunansaneenannensenennoaennenee® Roval Mail Group Limited
registered in England and Wales registered number 4138203 registered office 3rd Floor, 100
Victoria Embankment, London, EC4Y OHQ This email and any attachments are confidential
and intended for the addressee only. If you are not the named recipient, you must not use,
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—Lee EEE
She
From: The Rt. Hon. James Arbuthnot, M.P.
HOUSE OF COMMONS
LONDON SWI1A OAA
15 December 2011
Edward Davey MP
Parliamentary Under Secretary of State .
Department for Business, Innovation & Skills
1 Victoria Street
London SW1H OET
Yaar Edasert ,
T have been contacted by a number of constituents living in I Hampshire who are most
upset at the fact that their local post office has been closed, and a long-standing employee Jil
has been dismissed due to ‘irregularities’. I would be most grateful if you would look into
these related matters as 4 matter of urgency.
We discussed this matter some months ago, and Iam most concerned that the ‘irregularities’ may
be a continuation of the problems that Post Office employees have been having with the software
system that reconciled takings. 1 am aware of 34 individual employees throughout the country who
feel they have been wrongly accused of fraud due to faults in this particular system, and am
meeting with them in the New Year to discuss what action they plan on taking. You may recall that
this case was brought to my attention in 2008, when the SubPostmistress from
in Hampshire faced the same situation: Tt has not been rectified, a situation which
n
ot bring credit to the Royal Mail. Tam also writing to Ms Greene at to make her aware of
this.
T have alsg asked her if she might offer some comments on the reasons why this particular Post
fecal is now closed? Constituents quits tightly state that it is the worst possible time
freci is a hub for a number of surrounding
Office, in!
of year for it to close — in the run-up to Christmas.
small villages, and the Post Office there was well patronised.
[ would be grateful if you could let me have your thoughts.
Website: www.jamesarbuthnot.com
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From: Lamb MPST
Sent: 14 February 2012 16:23
To: [(Shex)
Ce: Gibson Will (ShEx); iy
i FW: Ex Sub postmasters meeting
Assume a decline - we had various conversations with ED about justice for
sub postmasters. Could you please send a para of background on them as
well so we can explain to NL why he should decline?
Thanks
I Department for Business, Innovation and Skills IT:
[mailto:normanlambmp¢
Sent: 14 February 2012 15:21
To: Lamb MPST
Subject: Ex Sub postmasters meeting
Name
Address
Email
Subject
Ex Sub postmasters meeting
Message
Dear Mr Lamb,
Congratulations on becoming the minister for postal affairs. As such, I was wondering if you are attending
the meeting in Portcullis house on the 27th of February chaired by the Rt Hon James Arbuthnot MP
regarding the 100+ ex postmasters who were accused of defrauding the Post Office and who are fighting to
clear their names due to the Horizon system used by the Post Office which caused the discrepancies. This
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includes myself.
Iran the [IMbranch between [land [before I was accused and promptly shut down. This, I
suspect, was due to the fact that the Post Office wanted the office to be moved. I will not go in to too much
detail as it would take too long, but I personally would appreciate you attending as I was one of your
constituents and did actually vote for you and have always voted Liberal. You may also get an insight into
what we are trying to achieve and all the obstacles that are preventing us from getting a fair hearing,
Thank you for your time
cou
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Erom: [ESS Eee ERS eae eT,
Sent: 12 March 2012 12:04
To: (ShEx
oo Te dees: Es:
Subject: FW: Stephen Hepburn MP
Attachments: 24FebSHepburn_1330956308990[1].pdf
9]
POL are not aware of any specific legal action from this
Subpostmaster.
The background to this case is as follows;
(Firstly just a point of clarification - jis the
Subpostmaster and not his wife +)
There have been ongoing problems at the branch for some time
and on 15 April [senior POL network managers visited the
branch to discuss the situation with [, her husband
being unwell and unable to attend. During this discussion
various aspects of performance were discussed and proposals
put to Mo tighten up controls to try and identify
where losses were occurring. This included setting up stock
units for the ATM [that had been recommended the year before
but not actioned] and Bureau de Change, and giving advice on
how to conduct spot checks. as reluctant at the
time to set up individual stocks as she stated she trusted her
staff and subsequently did not introduce these at this time
a separate ATM stock was set up.
An audit was conducted at the branch on 12 October [Mand it
was noted that the Sub Postmaster was unable to run this
Branch at present due to jIn his absence it has been
managed by his wife (WB) with a lot of assistance
from the staff. Since the 9th August Mit has been managed
by MMe to nable to return to
work full time following I Iwhilst she was
on holiday. .
The audit revealed a significant shortage at the branch that
had not been declared. [RBBMMMMhas admitted to falsifying
the accounts when doing the daily/weekly cash declarations.
could offer no explanation for the shortages other
than to blame the Horizon system. From the Cash Declaration
Summary printed off from Horizon another member of staff,
had also been falsifying the figures when
declaring the cash on hand.
contract for services was suspended and 9
as interviewed on 2 November following that audit.
It was clear at the interview on 2 November with
(who attended in place of her husband] that she was deeply
distressed at the current situation at land that
she was not aware of the actions taken by jor her
daughter QM. tt was also clear however that she
had not introduced all of the control measures detailed in an
earlier letter from POL dated 4 May 2011.
The options open to POL in this case were summary contract
termination, 3 months contract notice or reinstatement.
POL took the view that neither MMMvere aware of
or involved in the falsification of the accounts or in the
creation of the loss identified at the audit. Whilst it was
disappointing that the accounting controls at the branch had
not been introduced POL decided to reinstate [MMMMon a
final written direction on the understanding that the 2 staff
involved in falsifying figures are no longer employed at the
branch and that individual balancing is introduced
immediately. Mrs Riddell also stated that she would be
employing a manager to help run the branch.
It is noted that [MMMpad encountered losses over
a long period of time that would have encompassed 2 versions
of Horizon but since the reinstatement of Mr Riddell on 18
November under the conditions set and the removal of the
staff who falsified the records ( there have been no settled
centrally losses recorded.
Hope this helps.
Government Affairs
Royal Mail Group
100 Victoria Embankment
London
EC4Y 0OHQ
From: EE Shex) (mailto: I
Sent: 05 March 2012 15:08
Te
c (ShEx)
Subject: Stephen Hepburn MP
<<24FebSHepburn_1330956308990/1].pdf>>
Martin/Mike
Grateful for background and advice on this case. The letter refers to fee]
HEB (and others) taking legal action against POL for 'breach of contract’.
Is she linked to any of the Shoosmith cases directly or is there a 'class action’
case kicking around?
Regards
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Department for Business, Innovation and Skills
Shareholder Executive
Royal Mail and Postal Services
1 Victoria Street
London SW1H OET
The original of this email was scanned for viruses by the Government Secure Intranet
virus scanning service supplied by Cable& Wireless Worldwide in partnership with
MessageLabs. (CCTM Certificate Number 2009/09/0052.) On leaving the GSi this
email was certified virus free.
Communications via the GSi may be automatically logged, monitored and/or recorded
for legal purposes.
registered in England and Wales registered number 4138203 registered office 3rd Floor, 100
Victoria Embankment, London, EC4Y 0HQ This email and any attachments are confidential
and intended for the addressee only. If you are not the named recipient, you must not use,
disclose, reproduce, copy or distribute the contents of this communication. If you have
received this in error, please contact the sender and then delete this email from your system.
This email was received from the INTERNET and scanned by the
Government Secure Intranet anti-virus service supplied by Cable&Wireless
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: Viking Industrial Estat
Jarri
3DT
HOUSE OF COMMONS
LONDON SW1A 0AA
from {
“~ STEPHEN HEPBURN, M.F., FARROW CONSTITUENCY -
poosaass — 24" February 2012
DATE Re Our ref
29 FEB 2012
Edward Davey MP
Parliamentary Under-Sec} f State
Department for Business, fmnovation and Skills
1 Victoria Street
London
SW1H 0ET
Dear Minister
I have been contacted by of I
[Esse aE] s a sub-postmaster and runs
acting as an agent on behalf of Post Office Ltd. She informs me that she would like tol raise
concerns of the difficulties faced by sub-postmasters such as the use of the computerised
accounting and electronic system called Horizon. [J informs me that the system is
difficult to use and over time she found discrepancies in her accounts that she was unable to
explain. has informed me that she suffered significant financial loss due to the
losses incurred using this system and was subsequently suspended from her contract] with
Post Office Limited. strongly maintains that it is not possible, when using the
Horizon system, to establish the reason for any discrepancy and believes the system maybe to
blame for the discrepancies that have occurred. I am informed by EEE that although
she has since been reinstated by Post Office Limited she has had to dismiss two] staff
members, both of whom are close trusted family members. This situation has caused a great
deal of distress to} jand her family and [informs me that she and other
= sub-postmasters.are pursuing legal action against Post Office Limited for breach of contract. = 1
Therefore, I would be grateful if you could look into EEE concerns and let me know
your comments.
Yours sincerely
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From: Sean eee ae eae
Sent: 26 March 2012 15:32
To: (ShEx)
Ce: 5
} I(ShEx)
Subject: FW: Ashok Sharma MP.
= Lynx-AlokSharmaMPLI_ 133155327277 1[1].pdf
The background and current position on this case is as follows;
e The correspondents brother [ I was the Subpostmaster at
© RR contract was terminated (back in am HB) following an audit
identifying financial losses at this branch. ubsequently pleaded guilty to
two counts of false accounting contrary to Section 4 of the Fraud Act 2006 and a
confiscation order was made against him pursuant to the Proceeds of Crime Act
2002.
© Bas since claimed that the Horizon system was the reason for the shortage
and Post Office Ltd has received a letter before claim from [EEE (who are
instructed on his behalf) alleging wrongful termination of contract based on (a)
alleged failings in Post Office Ltd's internal processes and (b) the Horizon electronic
point of sale system used in branch. cis damages in the sum of circa
£150,000.
* Post Office Ltd has sent a robust response to the claim strongly denying liability. The
last correspondence on this matter was sent mid-December 2011. Post Office Ltd is
not aware of any substantive steps having been taken in order to progress this matter
since that date. Beyond this it would be inappropriate for Post Office Ltd to comment
further on this matter.
(I I understand that this is one of the five claims previously notified to BIS by POL)
Hope that helps
Government Affairs
Royal Mail Group
100 Victoria Embankment
London
EC4Y 0HQ
From: i She) (atc: iT
Sent: 12 March 2012 12:05
Ci ShEx)
Subject: Ashok Sharma MP
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<<Lynx-AlokSharmaMPLI_1331553272771[1].pdf>>
Another JFSA related case which appears to have been triggered by the
recent James Arbuthnot sponsored meeting. Helpful for background only to
know the outline of the eee oT en
Regards
Department for Business, Innovation and Skills
Shareholder Executive
Royal Mail and Postal Services
1 Victoria Street
London SW1H OET
The original of this email was scanned for viruses by the Government Secure Intranet
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email was certified virus free.
Communications via the GSi may be automatically logged, monitored and/or recorded
for legal purposes.
neneananeaannnannunnnnnannnnannananinnaannanaannnaannnnnnaanneneen® Roval Mail Group Limited
registered in England and Wales registered number 4138203 registered office 3rd Floor, 100
Victoria Embankment, London, EC4Y 0HQ This email and any attachments are confidential
and intended for the addressee only. If you are not the named recipient, you must not use,
disclose, reproduce, copy or distribute the contents of this communication. If you have
received this in error, please contact the sender and then delete this email from your system.
This email was received from the INTERNET and scanned by the
Government Secure Intranet anti-virus service supplied by Cable&Wireless
Worldwide in partnership with MessageLabs. (CCTM Certificate Number
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Communications via the GSi may be automatically logged, monitored and/or
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sun’ Stool Alok Sharma, MP for Reading West
i
HOUSE OF COMMONS
Norman Lamb MP LONDON SWIA 0AA
Parliamentary Under Secretary of State
Department for Business, Innovation & Skills
1 Victoria Street
London
SW1H 0ET
08 March 2012 I
Our ref:
er ce ne Le
9 tef Naw,
\ Please find enclosed two emails I have received from iI of
who is a constituent of mine, with regards to
an issue with Post Office computer systems used by sub-post-masters.
As you will see NEN has raised concerns about an alleged glitch in the Post Office computer
system, which has led to sub-post-masters being accused of false accounting. I would therefore be
grateful if you could investigate [INN concerns and provide me with your comments, ina
form that I can relay to my constituent.
Thank you for your attention to this matter.
Please reply to: -MP, House of Commons, London, SW1A 0AA.
¢: alok.sharma.mp: : www.aloksharma.co.uk Tel: RO
eens ' _ ;
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from = a
Sent: 01 March 20:
To: SHARMA, Alok
Subject: POST OFFICE -ALLEGED DISCREPANCIES.
Follow Up Flag: Follow up
Flag Status: Flagged
I wrote to you some time ago with regard to my brother who was caught up in dispute with regard to his sub-post office in
. nr. Birmingham [discrepancy £27,000)-.
He lost his job , the post office , his health and almost his whole reason for life .
As you may know many of the sub postmasters affected by the computer "glitch" 77 have taken legal action against Post
Office
My brother and many others , together with legal representatives and quite a few M.P."s had a meeting in London last
week on the 27th Feb in London -I don't if this meeting was callled an adjournment debate 27?
I know you can't do anything specifically as my brother is not in your constituency - BUT 1AM ASKING. YOU.TO-TAKE_
AY “IN'WHAT IS'GOING ON ~~ ~~ id
1am using the Free version of SPAMfighter.
SPAMfighter has removed 75 of my spam emails to date.
Do you have a slow PC? Try free scan!
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From: aa
Sent: lary 2011 20:42
To:
Ce:
Subject: leg ost OF
Follow Up Flag: Follow up
Flag Status: Flagged
I am writing to you as a follow up to the programme on 8.B.C. this evening " Inside Out" in which the question of
alleged errors made by sub postmasters was brought into the public domain -all brought about by alleged glitches in
the computerized system .
My brother A sexs RO ran a sub post office in TIT fel! foul of this system
to the extent ol which he had to plead guilty to false accounting .He has been suspended and has been
pure hell fc Jast 4/5 years with many court appearances, his health has suffered andIandother.._____ ____
members of the family have been trying to help him emotionally and financial over this period of time .[ He still owes
about £19000]
Luckily the aggrieved sub postmasters have now got together -to the extent of several hundreds - and some ,my
brother being one have started instituing legal actions against the Post Office . Their lawyers Shoosmiths & Harrison
are acting for them on a no win no fee basis so it looks like someone is beginning to believe an injustice is being done
. At no time have Post Office admitted there could be an error on their system .As it says on T.V. "LITTLE BRITAIN -
COMPUTER SAYS NO !"
I am asking you as my M.P. to take a personal interest in this situation , as it could well be that there are some Honest
people in OUR constituency who are being affected by this wholly unreasonable and heavy handed action being
taken by the Post Office.
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From: Whitehead Mike (ShEx)
Sent: 18 June 2012 12:35
To:
Ce: Gibson Will (ShEx); (She)
Norman Lamb is meeting Alan Bates JFSA + Issy Hogg on 27 June. Follow up to JFSA
meeting request a couple of months back. Suspect the timing is not altogether a
coincidence.
Regards
Department for Business, Innovation and Skills
Shareholder Executive
Royal Mail and Postal Services
1 Victoria Street
London SW1H OET
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From: [EN (ShEx)
Sent: 21 June 2012 17:33
To:
Subject: Emailing: MPs raise concerns over post office payment system -
Channel 4 News.htm
Attachments: MPs raise concerns over post office payment system -
Channel 4 News.htm
Referred to in my voicemail message
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and to improve the site, we remember and store information about how you use it. This is done using
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Channel 4 News
THURSDAY 21 June 2012
MPs raise concerns over post office payment system
Thursday 21 June 2012
MPs meet with Post Office officials to raise subpostmasters’ concerns over a payment system that they say has caused
inaccuracies for which staff are charged and held legally accountable.
‘A group of MPs led by the Conservative James
Arbuthnot presented a number of cases where
subpostmasters have been charged with theft and
held responsible for false accounting that they say
are the fault of the system they use.
The Horizon system was introduced in 2000 and is
used to process Royal Mail services by those running
a post-office within a shop. But since its
introduction, subpostmasters have complained that.
the system consistently records errors in accounting
which they are unable to correct, and that they are
held liable for the subsequent recorded losses.
‘One subpostmaster was charged with theft and told
to pay back £36,000, despite calling the system's support services when she realised that errors were being processed.
At first they took money out of her wages to make up the difference in the accounting errors, and then took her to court after an auditing visit.
“Iremortgaged my house, borrowed and was generously given enough money to repay the post office in full in order to get them to drop the theft
charge,” she said. “I had to plead guilty to 14 counts of false accounting in (the) Crown Court and only escaped prison because over 70 people turned up
to support me."
MPs are calling for disputed cases to be examined individually through a robust, transparent process. One of the problems raised by the campaign group,
Justice for Subpostmasters Alliance, is that subpostmasters’ appeals against theft are dealt with solely by the Post Office, with no independent
arbitrator.
“It is in the interests of everyone involved - constituents, their MPs, and Post Office Ltd - to get this matter resolved,” said James Arbuthnot MP, who said
he was positive about the meeting's outcome.
Paula Vennells, Post Office Limited's chief executive said: “The Post Office continues to have absolute confidence in the robustness and integrity of its
branch accounting processes. We have no hesitation in agreeing to an external review of these few individual cases that have been raised with us by Mr
‘Arbuthnot and some of his fellow MPs.’
Alan Bates from the Justice for Subpostmasters Alliance welcomed that the issue was being raised, “but unfortunately it only seems to be concentrating,
on one particular area,” he told Channel 4 News. “They're purely looking at false accounting - it is only one part of what's wrong with Horizon.”
He lists issues to do with a lack of training, lack of access to the system, subpostmasters' liability for losses and the failure of the system to produce an
audit trail,
Channel 4 © 2012
documents before using our Digi
have updated our TERMS AND CONDITIONS and PRIVACY
Products and Services.
co ensure you read both
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From: i (ShEx)
Sent: 22 June 2012 10:33
To:
Ce: Gibson Will (ShEx)
Subject: POL Horizon
Attachments: H21099_217959518.pdf
The only national daily pick up today I understand.
Regards
Department for Business, Innovation and Skills
Shareholder Executive
Royal Mail and Postal Services
1 Victoria Street
London SW1H OET
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Source: The Daily Telegraph {Main}
BISI Hise Edition:
oe County: UK
Date: Friday 22, June 2012 durrants
Page: 4
Area: 119 sq. cm ‘OGorkanaGroup
Circulation: ABC 575132 Daily
BRAD info:
Phone: f
Keyword: POST OFFICE
ge.
£46,000.00, scc rate £214.00
Post workers
win a review
of theft cases
By James Hall, Consumer Affairs Editor
A GROUP of sub-postmasters who claim
they were wrongly accused of theft and
fraud have forced the Post Office to
review their cases.
The 10 were accused of false account-
ing by the postal service after money
went missing.
They lost their contracts and some
went to prison.
‘The sub-postmasters always claimed
that deficiencies in the computer system
used in Post Office branches were to
blame for money going missing.
‘They are part ft wider group of about
100 sub-postmasters who are consider-
ing suing Post Office Ltd over alleged
problems with its computer system,
which is called Horizon.
Following a meeting between the Post
Office management and MPs on Monday,
the Post Office has appointed external
investigators to examine allegations of
deficiencies in the computer system
relating to the 10 cases.
‘The firm of forensic accountants, called
‘2nd Sight Limited, will re-examine the 10
cases to see whether the Horizon system
could be to blame for the accounting
irregularities.
A Post Office spokesman said it “con-
tinues to have absolute confidence in the
robustness and integrity” of its branch
accounting processes.
“Over the past 10 years, many millions
of branch reconciliations have been car-
ried out with transactions and balances
accurately recorded by 25,000 different
sub-postmasters.
“The Past Office had no hesitation in
agreeing to an external review of these
few individual cases that have been
raised with us by a number of MPs,” the
spokesman said.
Andrew Bridgen, a Conservative MP
who has an accused sub-postmaster in
his North West Leicestershire constitu-
ency, said the investigators should have
been appointed independently.
Mr Bridgen said: “I ‘would far rather
they be appointed by another body.
“I would prefer it if they were paid by
the Cabinet Office.
“It is important that this whole review
should be beyond reproach and con-
ducted at arm’s length from the Post
Office.”
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es
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From: ERSSeHU ee eerie SERRE Seana rea ey Ne ren
Sent: 26 July 2012 15:35
To: ShEx)
Ce: (Shex); as
Subject: FW: Albert Owen - JFSA
Attachments:
IncomingletterfromAlbertOwenMPtoNL_1342445030946[1].pdf; Newspaper
i TT 3c
PI
We have very little information to hand on the case regarding H:: it is so long ago.
It appears that Ee: suspended in ‘ollowing an audit &% we have
found a press article at the time that mentions the case I. It appears that
the branch remained closed until Hen it re-opened operated by a temporary
subpostmaster.
Unfortunately we donfit have any other information on this electronically as it appears that
those records started after this case.
I could ask for a search to be carried out for any manual archived files but this would not
meet your timescales and it may be that any files have been destroyed over this period of
time.
On the position of the review that is mentioned in the MPfs letter the situation is that it will
be an independent review and the specific cases and the timescale for the review are still to
be determined at this stage.
For info, the reactive position from POL at the time of the review being agreed was as
follows; i
Post Office spokesman said: [The Post Office continues to have absolute confidence in the
robustness and integrity of its branch accounting processes. Over the past ten years, many
millions of branch reconciliations have been carried out with transactions and balances
accurately recorded by more than 25,000 different subpostmasters. The Post Office has no
hesitation in agreeing to an external review of these few individual cases that have been
raised with us by a number of MPs.8
This affects a very small number of individual cases and to put this into context, over the
past ten years, many millions of branch reconciliations have been carried out with
transactions and balances accurately recorded by more than 25,000 different
subpostmasters. The Post Office continues to have absolute confidence in the robustness
and integrity of its branch accounting processes. We are not independently reviewing our
systems. We have agreed with MPs to commission an external review of a small number of
individual cases and report back on these. We already have processes in place to ensure
that systems and processes are fully audited and are robust.
Hope that helps
Regards
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Stakeholder Relations
Post Office Ltd
148 Old Street
London
EC1V 9HQ
From: SE (ShEx) (mailto:
Sent: 25 July 2012 17:09
To:
Ce: ; (ShEx); I Sex)
Subject: RE: Albert Owen - JFSA
I'm afraid I'm chasing on another letter today. Our response to Albert Owen is due
by the end of the week, I would be grateful for your advice by close of play
tomorrow.
Kind regards
I Shareholder Executive I Department for Business, Innovation & Skills
] I I wow.bis.cov.uk I
The Department for Business, Innovation & Skills (BIS) is building a dynamic and competitive UK
economy by creating the conditions for business success; promoting innovation, enterprise and
science; and giving everyone the skills and opportunities to succeed. To achieve this we will foster
world-class universities and promote an open global economy. BIS - Investing in our future
MES)
16 July 2012
Ce: P.
Subject: Albert Owen - JFSA
(ShEx); EEK Shex)
Dear
Grateful for advice relating to any history of accounting irregularities at what
I assume is HP ost Office (?) and more widely about recent progress
regarding the forensic review of cases (i.e. how many, and when the review
will be completed).
Many thanks
<<IncomingletterfromAlbertOwenMPtoNL_1342445030946[1]>>
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I Shareholder Executive I Department for Business, Innovation
& Skills I I I www. bis.gov.uk I
The Department for Business, Innovation & Skills (BIS) is building a dynamic and competitive
UK economy by creating the conditions for business success; promoting innovation,
enterprise and science; and giving everyone the skills and opportunities to succeed. To
achieve this we will foster world-class universities and promote an open global economy. BIS
- Investing in our future
The original of this email was scanned for viruses by the Government Secure Intranet
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and then delete this email from your system.
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EMBANKMENT, LONDON EC4Y 0HQ with the registered company number 04138203
POST OFFICE LIMITED registered in England and Wales at 148 OLD STREET, LONDON
EC1V 9HQ with the registered company number 02154540
pereEeEeeeet treet tts conenenee eeErrEEe et eeeas ceed
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HOUSE OF COMMONS
LONDON SWI1A 0AA
En cfOu ref
DSINESS, I
Ks >
%
Received
12 July 2012
Norman Lamb MP
Under Secretary of State
Employment Relations, Consumer and Postal Affairs
1 Victoria Street
LONDON
SW1H OET
Dear f orm aaa)
have recently met with my constituent i 0: i
to receive his briefing of the concern that exists over the
integnity of the Post Office’s Horizon system and the proposed independent review.
HER 24viscs me that like himself many sub-postmasters regard themselves as
victims of the unreliability and inaccuracy of the Post Office Horizon system and
have paid a considerable price. I note that the number of individuals involved is not
insignificant and there exists a strong consensus that the failings of the Horizon
system have been known for a long time.
It is only reasonable that I should be concerned for the wellbeing of any constituent
that may have fallen foul of a system that may be flawed and I am encouraged by the
news that there is to be an independent review of Horizon.
1 would value your advice on this matter and respectfully request that I be kept up to
date on developments and receive your report on the outcome of the review.
I thank you in anticipation of your assistance.
Yours sincerely
Albert Owen MP/AS
Ynys Mén
Wpnsa-8¢ ad ty ate yom lat pled © BIS.
Swyddfa'r Etholacth. TF Cledwyn House, 18 Stryd Thomas Street, Cacrgybi, Ynys Mon, LL65 IRR
Constituency Office, T} Cledwyn House, 18 Thomas Street, Holyhead, Isle of Anglesey, LL6S IRR
FfSn/Phone!. ] FacsiFa: I
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From: RRS SeS Aan ea ee nance enters Ta)
Sent: 27 July 2012 12:13
To: (ShEx)
Ce:
Subject: FW:
(ex SPM - Horizon review)
Attachments: N9Jun2012_1342546171490[1].pdf
rEg]
The background on this case is that [EEE was suspended in July [following an
audit, which EEE ndicates in his email, revealed a shortage of around £9000.
IS already paying back significant losses.
HERB 2s cue to attend an interview with POL on 17/10/ffJ but he resigned in a letter
dated 08/10/J and his resignation was accepted with effect from 22/07/.
Post Office received official notification of JIEEEEEEbankruptcy in July HEM The case was
kept open until January this year to see if any monies would be forthcoming from the
receiver, but none were received.
The general position on the review is the same as for the Albert Owen case that I sent across
yesterday and set out here for ease of reference
The situation is that it will be an independent review and the specific cases and the
timescale for the review are still to be determined at this stage.
For info, the reactive position from POL at the time of the review being agreed was as
follows; i
Post Office spokesman said: The Post Office continues to have absolute confidence in the
robustness and integrity of its branch accounting processes. Over the past ten years, many
millions of branch reconciliations have been carried out with transactions and balances
accurately recorded by more than 25,000 different subpostmasters. The Post Office has no
hesitation in agreeing to an external review of these few individual cases that have been
raised with us by a number of MPs.
This affects a very small number of individual cases and to put this into context, over the
past ten years, many millions of branch reconciliations have been carried out with
transactions and balances accurately recorded by more than 25,000 different
subpostmasters. The Post Office continues to have absolute confidence in the robustness
and integrity of its branch accounting processes. We are not independently reviewing our
systems. We have agreed with MPs to commission an external review of a small number of
individual cases and report back on these. We already have processes in place to ensure
that systems and processes are fully audited and are robust.
Also. I think that [iihas had a conversation with Raa this.
On your question
Hope this helps
Many thanks
Stakeholder Relations
Post Office Ltd
148 Old Street
London
EC1V 9HQ
ER sh) (naito
Sent: 18 July 2012 09:07
Subject: (ex SPM - Horizon review)
Dear
Please see attached another letter from an ex-SPM regarding the forensic review. I
suspect that we may see a great number more letters from ex SPMs over the coming
months.
I would be grateful for the POL version of events regarding [tenure as
SPM at and particularly regarding the transition of services from SPO to the
As well as the details of the forensic review that I requested earlier in the week (in
relation to the Albert Owen correspondence), it would be helpful to know
Many thanks
<<. un2012_1342546171490[1]>>
I Shareholder Executive I Department for Business, Innovation & Skills
I I ea I www.bis.gov.uk I
The Department for Business, Innovation & Skills (BIS) is building a dynamic and competitive UK
economy by creating the conditions for business success; promoting innovation, enterprise and
science; and giving everyone the skills and opportunities to succeed. To achieve this we will foster
world-class universities and promote an open global economy. BIS - Investing in our future
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The original of this email was scanned for viruses by the Government Secure Intranet
virus scanning service supplied by Cable& Wireless Worldwide in partnership with
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email was certified virus free.
Communications via the GSi may be automatically logged, monitored and/or recorded
for legal purposes.
This email and any attachments are confidential and intended for the addressee only. If you
are not the named recipient, you must not use, disclose, reproduce, copy or distribute the
contents of this communication. If you have received this in error, please contact the sender
and then delete this email from your system.
ROYAL MAIL GROUP LIMITED registered in England and Wales at 100 VICTORIA
EMBANKMENT, LONDON EC4Y 0HQ with the registered company number 04138203
POST OFFICE LIMITED registered in England and Wales at 148 OLD STREET, LONDON
EC1V 9HQ with the registered company number 02154540
This email was received from the INTERNET and scanned by the
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_— SSE I
8 June 2012 Vics
g we we L Ry
Dear Mr Lamb,
First of all, thankyou for taking the time to read this. As you are now aware, there are several ex-postmasters
trying to get justice for the appalling way they have been treated by the Post office.
i ‘ost office iE orn 2006 - 2008 and even voted for you. As you know, it is now in the local
' was treated in much the same way as the other ex subpostmasters but with a twist. This, I won't
go into in this letter, as I have another problem concerning the upcoming inquiry and you probably don’t have
much time.
My problem is that, I do not really have an MP to attend the meeting with me, as I am here near (ang
will soon be moving back to ea l= the 2th of this month. I know that you would probably
not be able to represent me at a meeting. Would you be able to advise me what course of action to take as
1 do not know when you intend to start the inquiry. I believe my new MP will be Matthew Hancock.
I thought you would also like to know what happened to myself, so I have enclosed a (very) brief account of
what happened at The twist is the second paragraph. If you would like a more detailed insight into
what happened, I woul pleased to meet with you. But I do understand that you cannot (probably) be
involved.
thankyou for your time
Once agai
- Sgasived 4
Yours sincerel Ceses : I I
- 1
cE 4 17 JUL 2012 I
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=
Bought Post office in Jun 2006
5 days training at (i
3 different trainers ( all giving different advice )
Computers only 128k processor. Always breaking.
Keypads often not working.
After remittance( stamp or money deliveries), we would be that amount down,
‘most of the time would not gain that amount back.
Post office only interested in sales of products to customers.
Asked for help several times, got none.
On one occasion, after a shortfall of £2000 I rang helpline and after doing what they told me it doubled to £4000,
I was told it would sort itself out and the phone was put down on me. This happened on several occasions with
different amounts.
Sold car to help pay shortfalls that showed on system week after week.
Paid back £15,000+ due to shortages over 2 years. Plus £9000 down at audit.
Jan 2008 took part time work.
May 2008, received phone call from IEEE with offer to buy office.
Jun 2008, audit team found loss. Suspended from office.
made firm offer to buy office, accepted and resigned ( 3months notice)
d after being advised "It would be for the best” Still offered no help.
Despite finding £9000 missing at audit, I was not prosecuted !!
uld not reply o
Oe observed ee I was still running nd
Ater 3 month notice period Post office took over sale and sold
May 2009 went bankrupt. Judge could see what had happened and wished me the best of luck.
He said it was VERY obvious what had happened.
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From: [I (ShEx)
Sent: 31 August 2012 12:51
To: : ae]
Ce: (ShEx); Gibson Will (ShEx)
Attachments: Es olicitors 23Aug2012.pdf
Grateful for background/advice on this case. In particular we need to consider whether we
advise them to contact James Arbuthnot/Second Sight or whether their clients should refer
the issue to their constituency MP who in turn would need to liaise with James Arbuthnot.
The other approach to consider is whether we note that a sample of cases are being reviewed
by forensic accountants and decisions on further cases being referred will be made in the light
of the outcome of the reviews which are in progress?
I think we need to think carefully now about first phase process as regards case numbers for
review , post review outcome scenarios and next steps in handling as I suspect that the
numbers of approaches such as this or from MPs will continue to drift in over coming weeks.
Regards
Department for Business, Innovation and Skills
Shareholder Executive
Royal Mail and Postal Services
1 Victoria Street
London SW1H OET
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ou Re
23 August 2012
United Kingdom
aE
ox SESE
Mr Norman Lamb MP
Minister for Employment Relations,
Consumer and Postal Affairs
Department for Business, Innovation
And Skills I wien
I 1 Victoria Street ;
LONDON :
SW1H OET. }
ar peg cs
Dear Sir,
OF
We refer to our above named client.
Our client is currently subject to ongoing Proceedings before Liverpool Crown
Court in relation to an allegation of false accounting arising from her previous
employment with the Post Office Limited. During the course of our client's
employment she was required to utilize Horizon, the Post Office Ltd’s computer
system. Our client has instructed us that as soon as the Horizon system was
installed, apparent cash shortfalls arose. Initially our client and her colleague.
who is also co-accused in this matter, covered these alleged
shortfalls in cash from their own funds. However, after a certain period of time
our client andI were unable to afford to do this and were therefore
compelled to attempt to conceal the shortfalls of cash. They did this by means of
temporarily delaying the entering of cash deposits on the Horizon system. Our
client asserts that any cash received was immediately placed into the Post Office
till and at no time was a loss caused to any individual or company concerned.
Our client maintains that she did not steal any money from Post Office Ltd and
that the apparent shortfalls appeared as a result of an error on the Horizon
computer system.
We have been informed that a number of MP’s have been consulted by other
employees of Post Office Limited who appear to have also been wrongly
accused of offences of theft, fraud and false accounting. We understand that
accordingly said MP’s are now actively involved in calling for a formal
afar Service
<p
Regulates by the Solc:tors Regulation Authority
Croanisaron’ SRA Na
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investigation into the issues surrounding the Horizon System and have contacted
you requesting your assistance with same.
- 4m these circumstances we would be obliged if you would be so kind as to confirm
what progress, if any, has been made to date in respect of the investigation into
the Horizon System and whether there are any other Authorities that we may
contact to assist us in actively pursuing our client's defence.
We thank you in anticipation of your co-operation in this matter and we look
forward to hearing from you.
Yours fatty
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From:
Ee
Sent: 05 September 2012 15:47
To: (ShEx)
Cec: (ShEx)
Subject: FW: John Pugh MP
Attachments: DrJohnPughMP_1345732316212[1].pdf
There are a couple of pieces of information that I have gathered that may help clarify the
Post Office position on the points that you have raised.
Firstly & the question of the document showing the amount of Crown Office losses was the
subject of an FOI request in March 2011 and the Post Office response on this aspect is set
out below
FOI Request
Referring to my previous response ref: PDJN-8EELZ9 and the following requests] DAre
you aware of a document, produced by the Post Office, entitled Losses and Gains Quick
Guide for Crown Managers'? It states in section 1 paragraph 1 that 'actual Crown
Office losses in 2007/2008 amounted to £2.2M0.
You have asked me to revisit my response to your points 3 and 4 in the light of this
information. These points are set out below for ease of reference:
First, please note that the document which you refer to was circulated to Post Office® Crown
Office staff only, and is clearly confidential. Post Office Limited has not consented to any
disclosure of this document to, or any use by, any third parties such as yourself. If you are
currently in possession of a copy of this document please destroy it and do not refer to its
contents in any communications with third parties.
O3. Please confirm whether or not Crown Post Offices made losses of £2.2m in
2007/2008.0
Post Office Limited does hold this information. However, this information is exempt from
disclosure pursuant to section 43(2) of the Act (Prejudice to Commercial Interests).
Commercial Interests
Post Office Limited believes that disclosure of information about losses reported for the
Crown Office Network would be likely to prejudice the commercial interests of Post Office
Limited. Post Office Limited competes with a large number of organisations who provide
banking, bill payment, money transfer and other services. Disclosure of the information
would be likely to damage customer confidence, and be exploited by Post Office Limited{’s
competitors, who could use the information to undermine the services provided in the Crown
Office network and seek to persuade customers to switch to their services. This would lead to
a reduction in the revenues earned by Post Office Limited, which clearly would prejudice its
commercial interests.
Public Interest
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n 43(2) is a qualified exemption and therefore the public interest test must be applied.
This involves weighing the balance of public interest in maintaining the exemption or
releasing the information. Post Office Limited understands that there is public interest in
promoting the transparency and understanding of matters which affect the public. However,
there is also public interest in allowing the normal course of commercial activity to take
place. On balance in our view, the greater public interest lies with maintaining the exemption.
More recently there was correspondence from another MP regarding Horizon and Crown
office losses & and relevant extracts from the response are set out below
The Post Office takes very seriously any perception that there is an issue with the accuracy
of the Horizon system. Over the past ten years, many millions of branch reconciliations
have been carried out by 25,000 subpostmasters and their staff in Post Office branches with
transactions and balances accurately recorded. We continue to have absolute confidence in
the robustness and integrity of the Horizon system, and our branch accounting processes.
The external review referred to in your letter is our decision to commission of a small
number of individual cases; where ex-subpostmasters have felt that their contracts to run a
Post Office were terminated inappropriately. These cases relate to the branch accounting
procedures and were brought to our attention by their constituent Member of Parliament, via
the office of James Arbuthnot MP.
The scope of our investigation has yet to be finalised; the Post Offices senior management
want the investigation to get to the truth and we wouldnt put our names to anything less
than full impartiality and transparency. An independent forensic accountant has been
appointed and to ensure impartiality, James Arbuthnot has reviewed and approved the
appointment.
Turning to losses, these can occur for a number of different reasons across our network,
including incorrect data entry, staff or agent theft and customer fraud. Horizon is basically an
accounting system which records individual accounting entries made by the user, as a result
of transactions they have performed with customers. It is a snapshot in time and losses (&
gains), particularly larger ones, usually come to light at a later stage; very often [Imissing
fundsI I are a keying or balancing error which can then be put right and reverse a loss or gain
brought to account. For example the incorrect keying of a deposit (£100,000.00 for £1000);
entering a deposit as a withdrawal; forgetting to enter the transaction; not taking the method
of payment.
The document {ILosses and Gains Quick Guide for Crown Managers” is an internal,
operational document and you will note that it is confidential. Post Office Limited has not
consented to any disclosure of this document, or any use by any third parties and we request
that XXXXX destroys her copy.
However, I am sure you will recognise that there are fundamental contractual differences
between a directly employed member of staff and an agent who offers Post Office services on
our behalf under a Contract for Services. However, as with our agency network, we have
robust disciplinary procedures in place which are followed in cases of carelessness,
negligence, or dishonesty by an employee. These procedures can ultimately lead to dismissal
and on occasion prosecution.
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Hope this helps
Stakeholder Relations
Post Office Ltd
148 Old Street
London
EC1V 9HQ
From: RE (Shex) (mailto: a I
Sent: 04 September 2012 09:34
To:
Cc: (ShEx)
Subject: FW: John Pugh MP
Any feedback on this case yet? Our deadline is Thu.
Regards
Department for Business, Innovation and Skills
Shareholder Executive
Royal Mail and Postal Services
1 Victoria Street
London SW1H OET
From: IIE she
Sent: 30 August 2012 17:02
To:
Subject: John Pugh MP
<<DrJohnPughMP_1345732316212[1].pdf>>
Grateful for advice/background on the claim that an internal POL memo in
September 2008 showed Crown office losses of £2.2m purported to be
attributable to Horizon, as referred to in the Asian Trader article.
Also helpful to know whether responsibility for any financial deficiencies at
Crown offices rests with branch managers or who, otherwise, is liable to repay
them.
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Regards
Department for Business, Innovation and Skills
Shareholder Executive
Royal Mail and Postal Services
1 Victoria Street
London SW1H OET
The original of this email was scanned for viruses by the Government Secure Intranet
virus scanning service supplied by Cable& Wireless Worldwide in partnership with
MessageLabs. (CCTM Certificate Number 2009/09/0052.) On leaving the GSi this
email was certified virus free.
Communications via the GSi may be automatically logged, monitored and/or recorded
for legal purposes.
This email and any attachments are confidential and intended for the addressee only. If you
are not the named recipient, you must not use, disclose, reproduce, copy or distribute the
contents of this communication. If you have received this in error, please contact the sender
and then delete this email from your system.
ROYAL MAIL GROUP LIMITED registered in England and Wales at 100 VICTORIA
EMBANKMENT, LONDON EC4Y 0HQ with the registered company number 04138203
POST OFFICE LIMITED registered in England and Wales at 148 OLD STREET, LONDON
EC1V 9HQ with the registered company number 02154540
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HOUSE OF COMMONS
LONDON SW1A 0AA
Our Ref: JDP/AP/It
Mr Norman Lamb
1 Victoria Street
London
SW1H OET
Date: 20 August 2012
Dear Norman,
You are on record as saying that JFSA victims (people effected by apparent
glitches in the Post Office accounting software) need to be happy with the
forensic accountants needed to look into it.
Could I urge you to stick to your guns on this as potentially some very serious
injustices have been done, In the case of one of my own constituents the
imputation of serious dishonesty deprived a sub post mistress of her livelihood
and good name. Major errors in the Crown Post Offices picked up recently
show how this may happen but this by itself is little consolation and no
vindication of those treated shabbily by the post office.
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SSSR
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News
‘Wrongly accused’ sub postmasters
hope external probe will clear them I
P.O. finally agrees to independent investigation into, postmasters’ claims they were wrongly accused of fraud
‘SUB-POSTMASTERS Su
accused of theft and fraud WS ___ & POST OFFIC:
have forced the Post Of-
fice to bring in external
accountants to review POST OFFICE
their cases, focusing on
alleged faults in the com-
puter system used in all
branches.
‘The decision was made
by the Post Office after its
management team met
with MPs last month to
look into the cases of 10
sub-postmasters accused
of wrong-doing.
‘The group were 2008 appears to back up ‘They are part of a never was. [ haven't taken
stripped of their contracts I theseclaims asit shows —__wider group of around a single penny from the
afer allegations of theft, I thatits own crown offices 100sub-postmasters who Post Office. I put money in
fraud and false account- I -whicharerunbyitseif I are considering suing Post the Post Office. [haven't
g, while some were sent and not bysub-postmas- Office Lid over alleged taken any of their money.
to prison in cases dating _I_ters—have made losses faults in its Horizon com- I Iwantto get my name
back five years. ‘of £2.2 million in one year _ puter system. cleared.”
However, the sub- alone, ‘One former Post Office Nevertheless, the Post
postmasters have always The Post Office has employee, Seema Misra, Office denies any prob-
Genied these allegations __ refused to publish figures, ran a branch in Surrey Jems exist in its computer
‘and claim the missing ‘on apparent losses at sub- I and wasjailed for four and accounting systems.
money is the fault of post branches. months after being con- A spokesman said:
severe deficiencies in the “The 10 sub-postmasters . victed in 2010 of stealing “The Post Office continues
Horizon computer system whose cases willbelooked nearly £78,000. to have absolute confi-
used by the Post Office. into say they have been She said she hoped the I dence in the robustness
‘An internal Post Office _ forced to payback thou- investigation would clear and integrity of its branch
memo sentin September sands that they didn’t take. her name:"I'm no thief, accounting processes.”
Campaigners blame problem on ‘faults’ in
the Post Office’s Horizon computer system
ALAN Bates, founder trouble and has caused = [] ve
ofaction group Justice enormous upset and oh
For Subpostmasters and hardship to people
Alliance, has welcomed —_across the whole of the
the investigation into country.
alleged faults in the We don’t think it's
Post Office’s Horizon —_—_ accurate. We think there
computer systems. are flaws in the system.
Mr. Bates formed the “Fortunately, now, it
alliance after having his looks like the Post Office HAEDED
contract terminated by are going to Jook into
the Post Office in 2003, some parts of it, though He recounts one had appeared as dupli-
for what he calls “mak- not the wholeissue. At __ occasion when his till cate transactions.
ing a fuss” about the least it’s a start.” showed he was more “This had come
Horizon system. ‘Mr. Bates sayshehad than £5,000‘short’, only about because of a soft-
Trosaide*Eversince highlighted faults about tofind through a search ware upgrade they had I
ithas been installed, it the systemever since it _of his till receipts that installed that week,”
has been nothing but was first introduced. the same sum of money _ said Mr Bates.
4 DAciantTranre #
UKGI00001482
UKGI00001482
From: I
Sent: 21 September 2012 17:37
To: (ShEx,
Ce: (ShEx);
Subject: RE: Horizon
Follow Up Flag: Follow up
= Status: Red
Wei 're still in the situation where we cani 't be definitive on timescales. We haven! 't dictated
timescales for the review on the position that Second Sight should operate outside of control
of the Post Office. The slow pace at which cases have come through means that it is difficult
to estimate a completion date at this point.
Hope this helps I_I can touch base by phone next week.
Thanks
Post Office Ltd
1st Floor, 148 Old Street, London, EC1V SHQ
(EE she) (2
r 2012 17:09
(ShEx)
Subject: Horizon
I understand you are in Brighton for part of next week but just wanted to follow
up on a voicemail message I left for you yesterday. Jo has asked for note on
the Horizon/JFSA/Arbuthnot/Forensic Accountants review which I need to get
into the box for noon next Thu.
I have most of what I need but think I should try to give at least an indicative
timescale for forensic review results/outcomes. Are we talking ‘later in the
autumn' ?
Regards
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Department for Business, Innovation and Skills
Shareholder Executive
Royal Mail and Postal Services
1 Victoria Street
London SW1H OET
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